U.S. airlines rise as Trump’s proposal revives bailout hope

0
9
FILE PHOTO: FILE PHOTO: American Airlines planes are parked at the gate during the coronavirus disease (COVID-19) outbreak in Washington

(Reuters) – Shares of U.S. airlines rose on Thursday, buoyed by hopes for a second bailout after the Trump administration proposed including a $20 billion extension in aid for the battered industry in a new stimulus plan.

Negotiations for coronavirus relief aid between the White House and House Democrats had stalled in large part over the price tag, with Democrats seeking $2.2 trillion and the White House staying firm at $1.5 trillion.

Shares of American Airlines, United, Delta Air Lines <DAL.N>, and Southwest Airlines <LUV.N> were up between 1.3% and 2.8% in pre-market trading.

U.S. airlines have been pleading for another $25 billion in support to protect jobs for a further six months after the previous package, which banned furloughs, expired at midnight Sept. 30.

The deadline expiry prompted American Airlines <AAL.O> and United Airlines <UAL.O>, two of the largest U.S. carriers, to announce they were beginning furloughs of over 32,000 workers.

Both airlines said, as per memos seen by Reuters, they would reverse furloughs if Washington extends aid which affect about 13% of their workforces before the pandemic.

“U.S. carriers have avoided the hard restructuring to date. While there have been furloughs, planes have been retired, and some layoffs are coming, but managements of these airlines have positioned these companies for an eventual recovery,” said Peter McNally, an analyst at research firm Third Bridge.

“The extreme numbers are unlikely in the short term.”

(Reporting by Rachit Vats in Bengaluru; Editing by Bernard Orr)

tagreuters.com2020binary_LYNXMPEG9049I-VIEWIMAGE

tagreuters.com2020binary_LYNXMPEG9049L-VIEWIMAGE

tagreuters.com2020binary_LYNXMPEG9049O-VIEWIMAGE

LEAVE A REPLY

Please enter your comment!
Please enter your name here